Evercore ISI notes that the “One Big Beautiful Bill” could quietly pump up cash balances at big software names like Microsoft (MSFT, Financial) and Oracle (ORCL, Financial). They've crunched the numbers and say that by tweaking how R&D and capital spending get deducted, companies will see more free cash flow sooner.
Under this plan, all domestic R&D costs can be written off right away and any qualifying capital outlay placed into service between 2025 and 2029 earns full bonus depreciation. That replaces the old schedule where, in 2025, only forty percent could be deducted immediately.
Microsoft alone could pocket about eleven billion dollars of extra cash flow next year, which works out to roughly one dollar and fifty cents a share. Oracle would see around three point three billion more, or just over a dollar per share, driven by their hefty AI and data center investments.
Pulling deductions forward like this means more money on hand for new projects, infrastructure upgrades, or even returning cash to investors. Evercore points out that software firms paying real cash taxes might boost free cash flow by roughly nine percent thanks to these tweaks.
That optimism shows up in Evercore's ratings too. They have both Microsoft and Oracle as outperform with raised price targets. It's clear they expect these tax changes to free up capital and help those tech giants fuel future growth.
